What About Colorado’s Millions of Other Tax Scofflaws?

Today the Denver Post lambasted Douglas Bruce, citing his “reckless and brazen” evasion of state taxes. Recently Bruce was convicted on multiple charges.

I have no doubt that Bruce a) organized his finances in ridiculously convoluted ways (as he seems to be able to do nothing simply), b) agitated virtually every politician, bureaucrat, and leftist ideologue in the state, and c) gravely erred by representing himself in court. Whether he’s actually technically guilty of violating the state’s tax laws, I could not say definitively without studying his case more carefully. What is obvious is that, on the moral level, what’s he’s actually “guilty” of is daring to spend his own money in politically unapproved ways.

But there’s a deeper point here that practically everybody else seems to be ignoring: the large majority of Colorado residents are likely in violation of the state’s use-tax laws. I wrote about this matter earlier in the year. My guess is that millions of Coloradans are tax scofflaws. So, in the broader sense, obviously Bruce’s prosecution is selective; the state simply ignores millions (or at least hundreds of thousands) of cases of (generally unwitting) tax evasion every year.

Here’s the comment I sent over to a couple members of the Post‘s editorial board: “Fair enough regarding Doug Bruce, though the prosecution still smells of political retribution. However, my guess is that well over 80 percent of those currently piling on Doug Bruce are in violation of the state’s use-tax requirements. I’d actually be curious to learn what fraction of the Denver Post editorial board is in compliance with the use-tax laws. I personally think it’s a problem that probably the overwhelming majority of Colorado residents are in violation of the tax law, but apparently this is not the sort of story the Post regards as interesting.”

Update: Curtis Hubbard, the editorial page editor of the Denver Post, informs me that he did in fact address the use tax less than two weeks ago! Somehow I missed that article. He correctly points out that most people don’t pay it and that the state doesn’t enforce it. However, his solution to the problem is to force out-of-state online retailers to collect the tax and remit it to the state. I have a rather different idea for how to equalize the treatment between in-state and out-of-state businesses:repeal the sales tax for in-state businesses (even if done in a revenue-neutral way by increasing other tax rates).